Why won’t utility companies innovate? Smart Grid leaders explain

November 4, 2010 11:26 AMMatthew Lynley

Utility companies aren’t willing to innovate and develop smarter power grids because it simply isn’t cost-effective most of the time, a number of cleantech leaders said at the GreenBeat 2010 conference in Palo Alto today.

The biggest issue was finding ways to make green technology and innovating the power grid more attractive from a financial perspective — and developing a true, intelligent Smart Grid. A panel consisting of Ron Dizy of Enbala Power Networks, Andres Carvallo of Grid Net and Gary Bloom of eMeter hit on most of the major challenges power grids face that are stifling innovation.

“For all the talk about green and its good, unless it’s saving money, it really doesn’t scale,” Dizy said.

Utilities are still at their core companies that need to remain operational and continue providing their services, Carvallo said. As a result, utility providers are often the slowest to innovate because of both reliability and cost issues, he said. And if the utility companies aren’t growing, they probably aren’t going to invest in innovation because they’re focused on survival, he said.

“The Smart Grid and all this infrastructure renaissance implies that you’re gonna gain a benefit,” Carvallo said. “If no benefit can be seen in a short period of time, then the utility’s not gonna make the investment.”

Nowadays, it’s more efficient to manage power grids based on demand — basically provide enough power to sate demand. That means utility companies don’t really plan for the massive spikes in power consumption that the introduction of electric vehicles might generate, Dizy said.

The next step to promote innovation in the power grid is to throw off that style of management, Dizy said. It’s been the de facto way of planning power grids for about 100 years, and utility companies have to encourage more flexible models for power generation at peak hours, he said.

So how will some of the cleantech leaders address those issues and make smart power grids more attractive? Check out VentureBeat’s GreenBeat 2010 coverage throughout the day to see some of the biggest leaders in green technology chime in.